The value of green bonds issued in 2014 passed the US$ 20 billion mark last week, as interest in environmentally friendly financial products grows. That is nearly double the total amount raised in 2013.

The Climate Bonds Initiative, a not-for-profit organisation, estimates the cumulative value of green bonds will reach US$ 50 billion by the end of 2014.

At present, green bonds provide a tiny fraction of the capital needed to develop low carbon technology. The International Institute for Applied Systems Analysis estimates some US$ 45 trillion of investment is needed by 2050 to prevent dangerous climate change, or US$ 1.1 trillion a year.

That could change, as individuals and institutional investors such as pension funds increasingly see the value of long term bonds, with fixed returns that are not threatened by climate change.

Meanwhile, corporations are finding they can get debt finance cheaper if they promise to invest the proceeds in windfarms or deep energy savings.

Following the path trod by development banks, consumer goods giant Unilever and European utilities GDF Suez and EDF have issued large scale green bonds in the past year. Many green bond offers have been two or three times oversubscribed.

The green bond market is still relatively immature, with no single set of criteria agreed on what may be described as “green”. As demand ramps up, there is increasing pressure from campaigners to develop and enforce consistent standards.

Investors, industry groups and NGOs are working together to bring some consistency to the market.

For example, last month the Climate Bonds Standard proposed rules on the type of buildings investment that can qualify for green status.

Under the rules, buildings must be in the top 15% of performance for greenhouse gas emissions in their sector or achieve energy savings of 30% to 50% to be eligible for green bond funding.

Sean Kidney, CEO of the Climate Bonds Initiative, said: “If we’re going to avoid catastrophic climate change we need to make deep cuts in our emissions from buildings; these new rules help investors identify green bonds that make a difference from paler green bonds, where the ambition levels are too low to make a real contribution to tackling climate change.”